Expectations Rise as Presidential Election Winner Emerges
Mixed Close on the 6th... Unemployment Rate Drop Also Positively Impacts
[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market closed mixed three days after the U.S. presidential election ended, but recorded the highest rise since April.
On the 6th (local time), the Dow Jones Industrial Average fell 66.78 points (0.24%) to close at 28,323.40, the S&P 500 index dropped 1.01 points (0.03%) to 3,509.44, and the Nasdaq index rose 4.30 points (0.04%) to 11,895.23.
The New York stock market reflected expectations regarding the election results and rose for four consecutive days this week, but ended neutrally on this day as investors took a wait-and-see approach toward future developments.
The weekly gains were 6.9% for the Dow, 7.3% for the S&P 500, and 9% for the Nasdaq. CNBC reported that this was the largest increase since April, and for the S&P 500, it was the biggest weekly gain during a presidential election week since 1932.
The news that the unemployment rate in October was 6.9% was positive. The employment situation, which had been deteriorating since the COVID-19 pandemic, showed continuous improvement. However, with recent daily new COVID-19 cases reaching 120,000, it is difficult to be confident about the sustained recovery of the economy and employment.
Additional economic stimulus measures remain uncertain. Mitch McConnell, the Republican Senate Majority Leader who won re-election, told reporters on this day, referring to the October employment figures, that "it supports my argument that a smaller scale is more appropriate than pouring in another $3 trillion." Larry Kudlow, chairman of the White House National Economic Council (NEC), also drew a line, saying, "We are not interested in $2 to $3 trillion."
Democratic House Speaker Nancy Pelosi maintained her position that a large-scale additional stimulus package is necessary. At a press conference on this day, Speaker Pelosi said the Republican proposal was "not attractive to me at all." Pelosi pointed to the fact that daily new COVID-19 cases in the U.S. exceeded 120,000 and emphasized that "the demand for us to take action has never been greater."
International oil prices plummeted due to COVID-19 concerns. West Texas Intermediate (WTI) crude oil for December delivery closed at $37.14 per barrel, down 4.3% ($1.65) from the previous day.
Gold for December delivery closed up 0.3% ($4.90) at $1,951.70 per ounce. The dollar value, which is linked to gold prices, also declined on this day. The dollar index, which shows the value of the dollar against major currencies, fell 0.24% to 92.293.
The 10-year U.S. Treasury yield rose 0.048 percentage points to 0.819 due to the positive employment data. With the Republican and Democratic parties tied at 48 seats each in the U.S. Senate election, the possibility of a 'Blue Wave'?where Democrats control both the House and Senate?re-emerged depending on the election results in Georgia, which also contributed to the rise in Treasury yields.
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